Mortgage rates had a chance to break to new highs this year, but the Federal Reserve took a moderate tone at the last Fed meeting. We saw the benefit of lower mortgage rates with the last two existing home sales reports, which showed growth. Then mortgage rates rose, facilitating five weeks of negative purchase application data.
As rates were hitting year-to-date highs, the fear was that the Fed would go hawkish in their March meeting, which could push mortgage rates toward 8% and tank 2024 demand. Thankfully, that didn’t happen, and — as I said on the HousingWire Daily podcast last week —we dodged a bullet.
Let’s look at the tracker data to see how mortgage rates are impacting the housing data as we settle into spring.
10-year yield and mortgage rate talk
For those of you who have me for the last 12 months, you know how important the 4.34% level on the 10-year yield is for my economic work. A break of this level could send mortgage rates toward 7.5%-8% for spring 2024. Not only did this not happen last week, but bond yields fell during the week. As we can see below, we have held the line once again, but we aren’t out of the dark forest yet.
As we can see in the chart below, the 10-year yield and mortgage rates have made a massive move higher since 2022. However, whenever the 10-year yield falls with duration, as we saw toward the end of 2022 and into 2023, it sends mortgage rates lower, and we can grow sales from these record-low levels.
Purchase application data
Purchase application data really moves on mortgage rates — something we saw in late 2022 and into 2023. As rates ticked up recently, purchase apps were down 1% week to week and down 14% year over year.
Since November 2023, we have had 10 positive and six negative purchase application prints after making holiday adjustments. Year to date, we have had four positive prints versus six negative prints. What have 2022, 2023, and 2024 shown us? When mortgage rates fall, demand picks up. Imagine a housing market with just 6% mortgage rates or lower — it would be growing like what we see in the new home sales market.
Weekly housing inventory data
The best housing story for 2024 so far is that inventory is growing yearly. The growth isn’t just in active inventory but also new listings. We’re not seeing seller stress in the inventory data but just a typical increase in inventory when rates are higher, which looks perfectly normal.
Here is a look at the inventory last week:
Weekly inventory change (March 15-22): Inventory rose from 507,160 to 512,759
The same week last year (March 16-23): Inventory fell from 414,967 to 413,883
The all-time inventory bottom was in 2022 at 240,194
The inventory peak for 2023 was 569,898
For some context, active listings for this week in 2015 were 985,141
New listings data
New listing data is growing! This data line is slightly lower than I hoped for for 2024, but we are still growing. Right now we are a tad below the levels we saw in 2022 before mortgage rates spiked over 6%. Here’s the weekly new listing data for last week over several previous years:
2024: 60,328
2023: 49,933
2022: 61,862
For some historical context, in 2011, new listings this week were at 362,339 .
Price-cut percentage
Every year, one-third of all homes take a price cut before selling — this is regular housing activity and this data line is very seasonal. The price-cut percentage can grow when mortgage rates move higher and demand gets hit. When rates fall, they go lower than an average year.
Keep it simple here, folks: inventory is growing year over year; if demand stays weaker with higher rates, the price-cut percentage data should increase faster, and if demand picks up with lower rates, it shouldn’t. As we can see below, the data line is very seasonal, like most housing data.
2024: 31.4%
2023: 30.4%
2022: 17%
The week ahead: Housing and inflation data
Next week, we have new home sales, pending home sales and the national home price index data. I will be on CNBC Monday morning to discuss the new home sales report. Of course, the Fed’s main inflation indicator, the PCE, will come out on Friday, which is a trading holiday, which will be key for rates short-term until we have the next Fed meeting. So, we have a lot of data to work with this week.
The economic landscape of the United States is experiencing a significant shift, marked by a new event: the average FICO credit score has dropped for the first time in a decade.
In a recently released report on credit score data from October 2023, major credit reporting company, FICO, says that the national average credit score has decreased for the first time in a decade from 718 to 717.
Why did credit scores drop?
The decrease in average credit scores may be attributed to several key factors:
Increased Missed Payments: There has been an increase in missed borrower payments, showing serious financial strain among consumers. The FICO report shows that, as of October 2023, more than 18% of the population was late on payments.
Rising Consumer Debt Levels: Consumer debt, particularly credit card debt, has risen to over 1 trillion. This indicates that more consumers may be leaning on credit cards to cover everyday expenses.
Slowing New Credit Activity: New credit activity – consumers applying for new lines of credit – has slowed down.
What this means for you
It’s hard to say what this will mean moving forward, but at this moment it’s too soon to say – or worry too much. In a statement given to Bloomberg, Ethan Dornhelm, VP at FICO, said that “This isn’t a blinking red light, but it certainly is a yellow light.”
Whatever happens in the future, it’s important to take steps to try to protect your credit. Here are some strategies:
Reduce Credit Utilization Rates: Your credit utilization ratio is the amount of available credit you have compared to the amount of credit you’ve used. Generally, the best practice is to keep your credit utilization ratio below 30%, if you can.
Consolidate Debt: If you’re worried about tracking different payments, consider consolidating your debt into one payment to avoid the risk of missing a payment. A missed payment is a negative mark on your credit, and can stay on your credit reports for 7 years.
Protect Your Credit History: Length of credit history is a significant factor in how your credit score is calculated. Closing a credit card that you’ve had for a long time, for example, might actually hurt your credit score. If you can, try to keep lines of credit – especially revolving credit accounts, like credit cards – open.
If You’re Rejected, Pause Before Applying Again: If you’ve been rejected for a line of credit in the past, like an auto loan or a credit card, pause before immediately applying again. Multiple “hard inquiries” – when a lender pulls your credit to evaluate your creditworthiness – in too short a time could potentially harm your credit.
Good credit is always important
If you’re worried about your credit, the best thing you can do is consistently check and monitor your credit – not just your score. Be on the look out for any changes to your credit reports and score, whether expected or unexpected, and make sure that everything in your credit profile is accurate. You can get started with a free credit assessment at Lexington Law for a snapshot of what’s in your credit profile.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!
My work on housing moves around the 10-year yield and the economics that move that. The growth rate of inflation has fallen a lot on the year-over-year data, but mortgage rates haven’t gone down, which isn’t surprising to me as my mantra has been:“Labor over Inflation.”
For 2024, the 10-year yield running between 3.80%-4.25% looks perfectly normal to me as long as the economic data is firm and the Fed hasn’t pivoted. I can’t see the 10-year yield below 3.37% unless the labor market breaks — meaning jobless claims over 323,000 on the four-week moving average. That means I can’t see mortgage rates going below 6%, especially with the spreads being bad, until the labor market or the economy gets weaker.
However, now we are at the same spot as last year, near the critical 4.34% level and we have the Federal Reserve meeting coming up. This is a big week, as you can see in the chart below.
With mortgage rates above 7% again, we will have to see what the Fed says at this meeting because, in the past few meetings, they have made it clear that policy is restrained and that they don’t want it to get too restrictive. This is what happened last year when the 10-year yield headed to 5% and we had 8% mortgage rates. However, there is a risk of the Fed sounding too hawkish again which would send the 10-year yield higher.
Purchase application data
As mortgage rates have been falling recently, we saw back-to-back weeks of growth in the purchase application data, which aligns with what we saw last year. Remember, we are working from extremely depressed levels in this data line, so the bar is so low that it doesn’t take much to move the needle.
Since November 2023, we have had 10 positive and five negative purchase application prints after making holiday adjustments. Year to date, we have had four positive prints versus five negative prints. Clearly, if mortgage rates can head toward 6% and hold we will get rising demand, but I believe the Federal Reserve wouldn’t be able to sleep at night if more people were buying homes.
Weekly housing inventory data
The one positive story for me in housing this year is that inventory is growing year over year for both active inventory and new listing data. I know it’s not a lot, but growth is growth. The one benefit of higher rates is that inventory can grow in the post-2010 qualified mortgage world as long as higher rates create softness in demand. It hasn’t been a lot of growth historically, but growth is growth.
Last year, the seasonal inventory bottom happened on April 14, which was the the longest time to find a seasonal bottom ever. This means we will show more than normal inventory growth until we get past tax day 2024.
Here is a look at the inventory last week:
Weekly inventory change (March 8-15 ): Inventory rose from 500,579 to 507,160
The same week last year (March 9-16): Inventory rose from 413,199 to 414,967
The all-time inventory bottom was in 2022 at 240,194
The inventory peak for 2023 was 569,898
For some context, active listings for this week in 2015 were 982,639
New listings data
New listings are growing yearly, which is another plus for housing. Last year, II picked up on the trend that new listing data was creating a historical bottom as the data line wasn’t heading lower with higher rates. The growth is a tad lighter than what I was hoping for. But as someone who didn’t buy the mortgage rate lockdown premise that inventory can’t grow with higher rates, this year is a good test case.
Here’s the weekly new listing data for last week over several previous years:
2024: 59,542
2023: 41,415
2022: 54,542
For some historical context, new listing data this week in 2010 was 306,020.
Price-cut percentage
Every year, one-third of all homes take a price cut before selling — this is regular housing activity and this data line is very seasonal. The price-cut percentage can grow when mortgage rates move higher and demand gets hit. When rates fall, they go lower than an average year.
Inventory is higher than last year, and we might have found the bottom already, so as the year progresses, the number of homes taking a price cut should increase. The goal is to see how the mortgage rate variable plays into this data line. This is why this week’s Fed meeting is key, to see if the 10-year yield can break higher, which should increase the price-cut data.
Here’s the percentage of homes that took a price cut before selling last week and how that compares to the same week in previous years:
2024: 31%
2023: 30%
2022: 17%
Week ahead: The Fed and housing data
The Federal Reserve’s language and the dot plot are the two things to watch this week. The dot plot should still show many Fed members having two to three rate cuts in play for 2024, with some going the opposite way from that group. We also will have tons of housing data coming out this week, including the builders’ confidence, housing starts, existing home sales, and Zillow home price data. However, the key is the Fed, Fed and the Fed!
What began as a small side hustle has evolved into one of the more popular online Etsy shops.
Noblesville couple Amie and Chris Knuckles created their online wood wall art and home décor business, Vintage Adventures, in 2015. In 2020, the business became a full-time venture when they launched the shop on Etsy, which – according to the Etsy analytics tool Erank – is in the top 2 percent of the platform’s sellers.
The couple, who have worked out of a garage at 936 Maple Ave. since 2021, created a key to the city for the late pop artist Jimmy Buffett in 2020, and one of their art pieces appeared in the 2022 movie “The Requin.”
“(When we started out) we both had really stressful (full-time) jobs, and going around to auctions and making things, it was fun, so it was like a hobby to start with,” Amie said. “We just enjoyed creating things. I never in a million years would have thought that this is what I would be doing. I was a director of nursing when this started. I never thought I would ever in a million years (run an art business).”
Initially, the Knuckles sold vintage furniture in a booth at the antique mall and eventually the Logan Village Mall. They started making and selling wall art after they decided to make art for their own walls in their booth space, which they thought were too bare. They started selling on Etsy after Chris lost his full-time IT job as a project manager during the COVID-19 pandemic.
“(Amie) came in the room, she’s like, ‘Let’s start an Etsy shop, it’ll be fun,’” Chris said. “And I always say that because every time we’re in here and we’re sweaty and we’re tired and exhausted, I’m like, ‘Let’s start an Etsy shop, it’ll be fun.’”
Although Amie devotes most of her time to the art business, she still works part time in a hospital.
Besides their Etsy shop, the Knuckles also have a website where they sell their art.
The Knuckles said their favorite part of their business is traveling, attending festivals, meeting people and the adventure of it all. They were invited to be a part of the Orange Beach Festival of Art in Orange Beach, Ala., March 9-10 and plan to attend more festivals this year.
“We’ve had a lot of great things happen to us over time,” Amie said. “When we get to the point where we start to doubt it, something really cool will happen that gets us to that next step and then we’re like, ‘Yeah, yeah, maybe this is what we’re supposed to do.’”
Amie and Chris said owning and operating Vintage Adventures is the highlight of their lives. They both take pride in their work.
“I look back on my (old full-time) career and think, ‘I did all that stuff but I didn’t do (anything). All I did was make some corporation more money or whatever, right?’” Chris said. “So, now, when I look at the stuff that we do (with our art business), it’s going to sound cheesy, but I feel like I’m leaving some sort of legacy, some part of me is still going to be around.”
THE KNUCKLES’ ART METHOD
Vintage Adventures owners Amie and Chris Knuckles create their wood art with lasers. They usually create a digital design and then use a CNC machine where a laser cuts a slab of wood into different pieces, according to the design.
Amie paints the pieces of wood, then the couple glues the pieces together and frame it.
Eventually, the couple plans make prints of the art that will be sold at a reduced price from the original pieces.
To find Vintage Adventures on Etsy, visit etsy.com/shop/VintageAdventuresLLC?ref=shop-header-name&listing_id=1027666500&from_page=listing.
For more on Vintage Adventures vintageadventureshomedecor.com.
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While the proposed tax credit appears unlikely to get through a Republican-controlled Congress, Biden has the ability to use the CFPB to push his housing policy agenda.
An ‘unwelcome surprise’
A CFPB blog post on Friday states that families closing a mortgage “often get an unwelcome surprise: closing costs that all too often are full of junk fees.”
According to the CFPB, one measure of closing costs is total loan costs, which includes title insurance, credit report, appraisal, and origination. These costs increased by 21.8% from 2021 to 2022, reaching nearly $6,000, per the CFPB post. And, as they are fixed, they have an “outsized impact on borrowers with smaller mortgages,” it added.
The post provoked a strong reaction from the Mortgage Bankers Association (MBA). Its president and CEO, Bob Broeksmit, stated that the use of the term junk fees is “illogical” and contradicts the White House’s definition, which is “lack of disclosure of the fee being charged.”
“The fees mentioned are clearly disclosed to borrowers well before a home purchase on forms developed and prescribed by the Dodd-Frank Act and the CFPB itself,” Broeksmit said in a prepared statement.
Broeksmit added that the Bureau’s “TRID” rule in 2015 and other rules imposed in 2020 reformed mortgage disclosures and customers’ ability to read these documents.
What’s the CFPB monitoring?
The CFPB said it will closely examine three topics: discount points, lenders’ title insurance, and credit reports.
Discount points have surged in recent years as mortgage rates have risen and competition has gotten more fierce. They were used by 50.2% of home purchase borrowers in 2022, compared to 32.1% in 2021. And, despite lenders selling points to reduce rates, it “may not always save borrowers money, however, and may indeed add to borrowers’ costs,” the CFPB said.
In another criticism of housing finance practices, the CFPB said lenders force borrowers pay for their title insurance, and the amount “is often much greater than the risk.”
Regarding credit reports, HousingWire reported in December that lenders’ prices would jump in 2024. The CFPB said that the “credit reporting industry is highly concentrated” and that “these steep increases in a market that lacks competition and choice warrant further scrutiny.”
“In the coming months, the CFPB will continue working to analyze mortgage closing costs, seek public input, and, as necessary, issue rules and guidance to improve competition, choice, and affordability,” the blog post reads. “We will also continue using our supervision and enforcement tools to make it safer for people to purchase homes and to hold companies accountable.”
Broeksmit has argued for years that it’s the CFPB that has made mortgage lending more expensive for consumers. The agency announces “new legal obligations without formal process or deliberation, enforcing novel and untested legal theories, and making it very difficult for firms to understand their legal obligations,” he said in 2022. A year later he described housing policy coming from Washington, D.C. as “extreme overregulation.”
In response to the CFPB’s latest “baffling” blog post, he noted that the agency has already imposed limits on lenders’ fees. The services covered, such as appraisals and flood hazard certifications, bring efficiency to the mortgage market and benefit consumers. The Federal Housing Administration (FHA), Department of Veterans Affairs (VA), Fannie Mae, and Freddie Mac also require these services.
The MBA, according to him, is also concerned “regarding rising costs of the tri-merge credit reports” and shares the “desire to help more Americans become homeowners.”
“MBA is eager to continue working with the Biden administration in these efforts but will vigorously oppose politically motivated proposals that only increase regulatory costs, reduce competition, or otherwise make it more difficult for Americans to get the credit necessary to achieve homeownership,” Broeksmit said.
The 10-year yield is the key for all my housing work, so I focus on it religiously. In my 2024 forecast, I put the 10-year yield range between 3.21%-4.25%, with a critical line in the sand at 3.37%. If the economic data stays firm, we shouldn’t break below 3.21%, but if the labor data gets weaker, that line in the sand will be tested at 3.37%.
This means mortgage rates should stay between 5.75%-7.25% with a baseline assumption that the spreads will be bad for most of the year. The 10-year yield has traded above 4.25% this year, but mortgage rates didn’t reach 7.25%, so the spreads have acted better than I thought they would.
We recently dodged a bullet when the 10-year yield got close but didn’t break above 4.34%, which could have led to mortgage rates back to 8% again. We have bounced off that key line several times and last week, even with jobs data and Powell talking to Congress, the 10-year yield headed lower and mortgage rates ended the week at 6.85%. The chart below shows last week’s 10-year yield trading (March 4-8).
In the chart below, you can see why I have discussed the critical levels for the 10-year yield in the past: the bottom is around the 3.80% level and the top is the 4.34% level. We haven’t broken either yet. Given our current economic data and without a new critical global event, this range should stick. It’s a plus for mortgage rates that the U.S. dollar isn’t getting stronger but slowly falling — the world can’t handle it getting more robust. Powell said that Fed policy is restrictive, so if the 10-year yield breaks above 4.34%, I expect the Fed to be more dovish as they don’t want policy to get too restrictive.
Here is a longer-term look at the 10-year yield to give you the scale of the move in recent years.
Purchase application data
As mortgage rates rose from 6.63% to 7.16% earlier this year, we had five straight weeks of negative purchase application data, something we didn’t see last year. However, that changed last week. With rates going lower, we saw 11% week-to-week growth.
Since November 2023, we have had nine positive and five negative purchase application prints after making holiday adjustments. Year to date, we have had three positive prints versus five negative prints. This is a carbon copy of what happened in 2023 when rates went higher. However, we were worked from a lower bar in home sales last year. Moving the needle doesn’t take much since we all know we have buyers ready to go and home sales are at record lows.
Weekly housing inventory data
The positive story for housing in 2024 has been the inventory growth we have seen year-over-year. Yes, I know it’s not a lot of homes, but growth is growth, people! The farther away we stay away from the savagely unhealthy housing market of March 2022, the happier I will be.
Now, one thing about the year-over-year inventory data, the seasonal bottom last year happened on April 14, which was the longest time ever to find a seasonal bottom. With this information at hand, the year-over-year comps will show more growth than a traditional year, when we would find a seasonal bottom in January or February.
Here is a look at inventory last week:
Weekly inventory change (March 1-8): Inventory rose from 498,339 to 500,579
The same week last year (March 2-9): Inventory fell from 419,419 to 413,199
The all-time inventory bottom was in 2022 at 240,194
The inventory peak for 2023 was 569,898
For some context, active listings for this week in 2015 were 971,965
New listings data
New listings data is growing yearly, but it’s still a bit too low for my liking in 2024, as I was hoping for more of a rebound because this data line was running at the lowest levels ever recorded in 2023. However, growth is growth, and if we can match spring 2022 and 2021 levels, I will be a happy camper.
Weekly new listing data for the last week over several previous years:
2024: 59,243
2023: 50,687
2022: 59,661
For some historical context, new listing data this week in 2011 was 362,248.
Price-cut percentage
Every year, one-third of all homes take a price cut before selling — this is regular housing activity and this data line is very seasonal. The price-cut percentage can grow when mortgage rates move higher and demand gets hit. When rates fall, they go lower than an average year.
Inventory is higher than last year, and we might have found the bottom already in inventory, so as the year progresses, the number of homes taking a price-cut should increase. The goal is to see how the mortgage rate variable plays into this data line.
Here is the price cut percentage for the last week over the past several years. As you can see below, in 2022 when inventory was at all-time lows and mortgage rates were sub-4 %, the price-cut percentage data was at a savagely unhealthy low level.
2024: 30.5%
2023: 30.6%
2022: 16.7 %
Week ahead: Inflation week Is here
We are going from jobs week into inflation week when we will get CPI and PPI inflation reports. The CPI data will be interesting because every nerd in America said the same thing about the last CPI report. The report included a giant odd OER print that deviated wildly and made the data hotter than it should have. We shall see if that normalizes in this report or the next. As we all know, the apartment boom-to-bust is creating more disinflation data with apartment rents. If the inflation reports come in much softer than anticipated, we can see lower mortgage rates continue this week.
Hey, I’ve just been featured on CNBC and I want to say hello to all of my new readers. You can read the CNBC article here – 34-year-old mom dropped $50,000 to cruise the world with her family: ‘It was some of the best money I ever spent’ If you are a new visitor –…
Hey,
I’ve just been featured on CNBC and I want to say hello to all of my new readers.
You can read the CNBC article here – 34-year-old mom dropped $50,000 to cruise the world with her family: ‘It was some of the best money I ever spent’
If you are a new visitor – welcome to Making Sense of Cents!
I have received many emails about how I was able to afford this trip. I have a free How To Start A Blog course that you can sign up for here. I also talk about this below and how I’ve been able to earn over $5,000,000 blogging over the years.
If you want to read more about my world cruise trip, I recommend reading Around-The-World Cruise With A Kid (25+ Countries In 4 Months!).
Here are some blog posts that you may find helpful and enjoy:
If you have any questions, please leave a comment below or send me an email.
Thanks for stopping by.
-Michelle Schroeder-Gardner
—-
In addition to reading the CNBC article linked above, I also want to talk about how I grew a blog that has earned me over $5,000,000. I know I will get a lot of questions, so I figured it’s best to lay it all out right here 🙂
What started as just a hobby turned into one of the most life-changing things I’ve ever done – that’s starting my blog, and learning how to make money with it.
Since learning how to monetize a blog over 10 years ago, I have now earned over $5,000,000 from my site. This is still hard for me to believe, and I’m the one who’s lived it!
In the beginning, all I was doing was tracking my own personal finance progress as I finished school and started paying off my student loans. Blogging was a very new concept to me at the time – I heard about it from a magazine – and people were just learning how to monetize blogs back in 2011.
Most bloggers started back then with display ads and sponsored posts, but the options have only increased.
Because of all of the new ways to make money blogging, like affiliate income and selling your own products, you can make somewhat passive income as a blogger.
Passive income is my favorite way to make money because it makes blogging even more flexible and something I can do as I work from home, travel, and work whenever I want.
Blogging has changed my life for the better, and I’m now earning thousands of dollars a month doing something I love.
Learning how to monetize a blog takes work and time, but it’s 100% possible to do. I started earning money after just six months of blogging, and I didn’t even set out to make money when I created Making Sense of Cents. Just think of the potential if you start out knowing that making money blogging is possible!
Starting my blog is one of the best things I’ve ever done for my work, personal, and financial life. And, I urge anyone who is interested to start a blog and learn how to monetize it.
How I earned my first income from blogging
Many of my readers have heard this story, but I love sharing it because I started out like many of you, except I had no idea that blogs could make money. When I started Making Sense in August of 2011, I simply wanted a way to keep track of my financial progress and meet others who had similar goals.
As I started getting to know other bloggers in the community, a blogger friend of mine connected me with an advertiser who was willing to pay me $100 for an advertisement.
I couldn’t believe someone would pay me $100 to advertise on my site!
While it wasn’t a lot of money, especially considering the amount of time and work I put towards my blog in those 6 months, it was very motivating to see that something I loved doing could actually make money.
After that first $100, I started doing a lot of research on how to monetize a blog, and my blogging income quickly grew from there.
One year after I started my blog, I was earning around $1,000 a month, and I was making around $10,000 monthly two years after I started Making Sense of Cents.
My income only continued to grow, and I am still earning a healthy income from this website today.
How To Start A Blog FREE Course
If you want to learn how to monetize a blog and you haven’t started your blog, then I recommend starting with my free blogging course How To Start A Blog FREE Course.
Here’s a quick outline of what you will learn in this free course:
Day 1: Reasons you should start a blog
Day 2: How to determine what to blog about
Day 3: How to create your blog – in this lesson, you will learn how to start a blog on WordPress, and my tutorial makes it very easy to start a blog
Day 4: How to monetize a blog – this is where you learn about the many different ways to make money blogging!
Day 5: My tips for earning passive income from your blog
Day 6: How to grow your traffic and followers
Day 7: Miscellaneous blogging tips that will help you be successful
This is delivered directly to your email inbox, and you will learn how to grow a blog from scratch.
Start with a plan for your blog
Sure, you can start on a whim, and that’s kind of what I did, haha.
But, I do think that creating a plan is a good idea if you want to learn how to monetize a blog. This can help you get an organized start, identify your blog’s niche, decide on your blogging goals, find opportunities for blogging income, and more.
It wasn’t until 2015 that I finally created a blogging plan (that’s 4 years after I started!), and my blog income grew significantly after that.
I credit that growth to creating a plan!
Having a plan would have been a huge help in the beginning, and I wish I would have started with one. I probably missed some income opportunities because I had no real plan or direction in the first couple of years.
Since creating a blogging plan, I became more focused on goals and motivated toward improving and building Making Sense of Cents.
Here are some questions that you may want to ask yourself when creating a plan for your blog:
What will you write about on your blog?
How do you want to make money with your blog?
What will you do to reach readers on your blog?
What are your goals for your blog?
Thinking about, researching, and answering these questions will help guide you on your journey and help you decide what to do next.
Write high-quality and engaging blog posts
Your blog’s content is extremely important. This will be what attracts your readers, has them coming back for more, earns you blogging income, and more.
Now, you don’t need to be an expert or need a degree to start talking about a subject, but you do need to be knowledgeable or interested in what you are talking about. And, always be truthful! This will show in your writing and actually help your readers.
To write high-quality content on your blog, here are some tips:
Figure out exactly what it is that you’d like to write about and why you think the content is important. Being passionate about a subject will give you the motivation to write content that people want to read. Just think about it: If you don’t enjoy writing your content, then why should you expect someone else to want to read it?
Ask your audience what they want you to write about. Many of my best ideas come from expanding on reader questions.
Research your blog topics by reading news articles, going to a library, searching for statistics and interesting facts, and more.
If your blog posts are more personal in nature, then dig deep and share your thoughts, and be personable in your writing – your readers want to hear your story!
Write long, helpful content. Sure, some great content may only be a few hundred words, but to be as helpful as possible, long content is usually the best. My content is usually over 2,000 words, and this article is around 5,000. Now, you don’t want to just write a lot of fluff content in order to get more words in – you want to actually be helpful!
Reread your content. I used to read my content 10 times or more before I would publish it. Now, I have an editor who makes sure I’m always publishing high-quality content.
Network, network, network
If you want to learn how to monetize a blog, then networking can be extremely helpful.
Networking can mean:
Making friends with other bloggers
Attending blogging conferences
Sharing content that other bloggers have written
Following other bloggers in your niche on social media
Signing up for other bloggers’ newsletters
Joining blogging groups on Facebook
Some bloggers don’t do any of these things and purely see other bloggers as competition. I don’t believe this is the correct way to approach blogging because you will hold yourself back immensely!
Networking is important because it can help you enjoy blogging (friends are nice to have, right?!), teach you new ideas (such as how to make money blogging or how to grow a blog), make valuable connections, and more.
Keep in mind that networking is even how I earned my very first $100 blogging. My blogging friend connected me with an advertiser, which helped changed my blogging journey.
I have learned a lot about blogging from the blogging community, and the people I’ve connected with have been a tremendous support as I’ve grown my blog.
Be prepared to put in a lot of hard work
Starting a blog is relatively easy. But, growing and learning how to monetize a blog takes a lot of work.
You’ll have to:
Start a blog, design it, create social media accounts, and more
Write high-quality blog posts
Attract an audience of readers
Monetize your blog
Continue learning about blogging
And more
Even when I was just a new blogger and had no plans of making money blogging, I was still spending well over 10 hours a week on Making Sense of Cents.
When I was working my full-time day job and earning an income from my blog, I was working around 40-50 hours a week on my blog on top of my day job!
Now that I blog full-time, my hours vary. Some months I hardly work, and there are other months that I may work 100 hours a week.
It’s not easy, and there’s always something that needs to be done.
But, I absolutely love blogging, which makes the hard work a little less tough.
How to monetize a blog: 4 different ways
There are many different ways you can monetize your blog, including:
Affiliate marketing
Advertisements and sponsorships
Display advertising
Create your own product, such as an ebook, course, physical or online products, and more
You could choose to monetize your blog using all of these methods, or even just one. It’s just a personal decision.
For me, I like to be diversified and monetize in many ways, so I do them all.
Below, I am going to dive a little deeper into each way to make money blogging.
1. Affiliate marketing
Affiliate marketing can be a great way to make money blogging because if there is a product or company that you enjoy, all you have to do is review the product and share a unique affiliate link where your readers can sign up or make a purchase.
In fact, this is my favorite way to monetize a blog. I enjoy it because it can be quite passive – I can create just one blog post and potentially earn an income from it years later. This is because even though a blog post may be older, I am still constantly driving traffic to it and readers are still purchasing through my affiliate links.
Affiliate marketing is a blog monetization method where you share a link to a product or company with your readers in an attempt to make an income from followers purchasing the product through your link.
Here are some quick tips so that you can make affiliate income on your blog:
Use the Pretty Link plugin tocleanupmessy-lookingaffiliatelinks. I use this for nearly all of my affiliate links because something like “makingsenseofcents.com/bluehost” looks much better than the long, crazy-looking links that affiliate programs usually give you.
Provide real reviews. You should always be honest with your reviews. If there is something you don’t like about a product, either don’t review the product at all or mention the negatives in your review.
Ask for a commission increase. If you are doing well with a particular affiliate program, ask to increase your commissions.
Build a relationship with your affiliate manager. Your affiliate manager can supply your readers with valuable coupons, commission increases, bonuses, and more.
Write tutorials. Readers want to know how they can use a product. Showing them how to use it, how it can benefit them, and more are all very helpful.
Don’t go overboard. There is no need to include an affiliate link 1,000 times in a blog post. Include them at the beginning, middle, and end, and readers will notice it. Perhaps bold it or find another way for it to stand out as well.
You can learn more about affiliate marketing strategies in my course Making Sense of Affiliate Marketing.
2. Advertisements and sponsorships
Advertising on a blog is one of the first ways that bloggers learn how to monetize a blog. In fact, it’s exactly how I started!
This form of blogging income is when you directly partner with a company and advertise for them on your website or social media accounts.
You may be writing a review for them, a tutorial, talking about their product or company, taking pictures, and so on.
If you want to learn how to increase your advertising-income, I recommend taking my Making Sense of Sponsored Posts course.
3. Display advertising
Display advertising is one of the easiest ways to make money blogging, but it most likely won’t earn you the most, especially in the beginning.
I’m sure you’ve seen display ads before. They may be on the sidebar, at the top of a post, within a blog post, and so on.
The ads are automatically added when you join an advertising network, and you do not need to manually add these ads to your blog.
Your display advertising income increases or decreases almost entirely based on your page views, and once you place the advertisement, there’s no direct work to be done.
If you want to learn how to monetize a blog through display advertising, then some popular networks include Adsense, MediaVine, and AdThrive.
Personally, I use AdThrive for my display advertising network. I don’t have many display advertisements on my blog, but it is easy income.
4. Sell your own products
Another popular way to monetize a blog is to create a sell your own products.
This could be an online product, something that you ship, and so on, such as:
An online course
A coaching program
An eBook
Printables
Memberships
Clothing, candles, artwork, hard copy books, and anything else you can think of
And the list goes on and on. I have seen bloggers be very successful in selling all kinds of things on their blogs.
What’s great about selling your own product is that you are in complete control of what you are selling, and your income is virtually unlimited in many cases.
I launched my first product about 5 years after I created Making Sense of Cents, which was a blogging course called Making Sense of Affiliate Marketing. I regret not creating something sooner because this has been an excellent source of income and has helped many people along the way.
Have an email list
If you really want to learn how to monetize a blog, I recommend that you start an email list from the very beginning.
I waited several years to start my email list, and that was a huge mistake!
Here’s why you need an email list right away:
Your newsletter is YOURS. Unlike social media sites, your newsletter and email subscribers are all yours, and you have their undivided attention. You don’t have to worry about algorithms not displaying your content to readers, and this is because they are your email subscribers. You aren’t fighting with anyone else to have them see your content.
The money is in your email list. I believe that email newsletters are the best way to promote an affiliate product. Your email subscribers signed up to hear what YOU have to write about, so you clearly have their full attention. Your email list, over any other promotional strategy, will almost always lead to more income and sales.
Your email subscribers are loyal to you. If someone is allowing you to show up in their inbox whenever you want, then they probably trust what you have to say and enjoy listening to you. This is a great way to grow an audience and a loyal one at that.
Email is a great way to deliver other forms of content. With Convertkit, I am able to easily create free email courses that are automatically sent to my subscribers. Once a reader signs up, Convertkit sends out all the information they need in whatever time frame I choose to deliver the content.
Attract readers
As a new blogger, you’ll want to find ways to attract a readership to your blog and your article.
No, you don’t need millions and millions of page views to earn a good living from blogging. In fact, I know some bloggers who receive 1,000,000 page views yet make less money than those with 100,000 monthly page views.
Every website is different, but once you learn what your audience wants, you can start to really make money blogging, regardless of how many page views you receive.
Having a successful blog is all about having a loyal audience and helping them with your content.
Even with all of that being said, if you want to learn how to monetize a blog, learning how to improve your traffic is valuable. The more loyal and engaged followers you have, the more money you may be able to make through your blog.
There are many ways to grow your readership, such as:
Write high-quality articles. Your blog posts should always be high-quality and helpful, and it means readers will want to come back for more.
Find social media sites to be active on. There are many social media platforms you can be active on, such as Pinterest, Facebook, Twitter, Instagram, TikTok, Youtube, and others.
Regularly share new posts. For most blogs, you should publish content at least once a week. Readers may forget about you if you go for weeks or months at a time without a blog post.
Guest post. Guest posting is a great way to reach a new audience, as it can bring new readers to your blog who will potentially subscribe to it.
Make sure it’s easy to share your content. I love sharing posts on social media. However, it gets frustrating when some blogs make it more difficult than it needs to be. You should always make sure it’s easy for readers to share your content, which means your social media icons should be easy to find, all of the info input and ready for sharing (title, link, and your username tagged), and so on. Also, you should make sure that when someone clicks on one of your sharing icons the title isn’t in CAPS (I’ve seen this too many times!).
Write better titles. The title of your post can either bring readers to you or deter them from clicking over. A great free tool to write better headlines is CoSchedule’s Headline tool.
Apply SEO strategies. SEO (search engine optimization) is not something I can teach in this small section, but I go over it below in another section.
Have a clean and user-friendly blog design. If you want more page views, you should make it as easy as possible for readers to navigate your blog. It should be easy for readers to find your blog homepage, search bar, blog posts, and so on.
Now, I also want to talk about helpful resources, courses, and more that can help you to learn how to grow your page views on your blog.
Below are some of my favorite blogging resources to help you improve your traffic:
Grow through SEO
SEO (search engine optimization) is how you get organic search traffic to your blog.
When you search a phrase on Google, you’ll see a bunch of different websites as the results. This is the result of these websites applying SEO strategies to their blog.
This is a great way for readers to find your blog, and SEO is important to pay attention to as you learn how to monetize a blog!
Below are some of my favorite SEO resources:
Stupid Simple SEO: This is my favorite overall SEO course, and one of the most popular for bloggers. I highly recommend taking it. I have gone through the whole course, and I constantly refer back to it.
Easy On-Page SEO: This is an easy-to-follow approach to learning on-page SEO so your articles can rank on Google. I have read this ebook twice, and it is super helpful.
Easy Backlinks for SEO: This ebook will show you 31 different ways to build backlinks, which are needed for SEO.
How To Get 50,000 Pageviews per Month With Keyword Research: This ebook shares the steps for keyword research so that you can get SEO traffic to your website.
Common questions about how to monetize a blog
Below, I’m going to answer some questions I’ve received about how to start a blog such as:
How many views do you need to monetize a blog?
How do beginner bloggers make money?
Why do bloggers fail?
How many posts should I have before I launch my blog?
How many times a week should I post on my blog?
How many views do you need to monetize a blog?
The amount of page views needed to make money blogging varies, and there is no magic number that you should be aiming for.
This is because it depends on so many factors, such as how you will monetize your blog, your niche, the number of email subscribers you have, the quality of your website, and more.
You may see success with 10,000 page views a month, or you may see success with over 100,000 page views a month. It simply depends on the factors above.
How do beginner bloggers make money?
Beginner bloggers can make money in many different ways, such as display advertising, affiliate marketing, creating their own products, and sponsorships.
You can start any of these right from the very beginning.
Display advertising is usually the easiest way to begin monetizing a blog, but the payoff is not very high, especially in the beginning when your page views are not high.
How many posts should I have before I launch my blog?
I recommend just launching your blog as soon as you have one blog post and a design. Building a huge backlog of blog posts isn’t usually needed, and it can prevent you from ever getting started!
How many times a week should I post on my blog?
The more blog posts you have, then the more traffic you may get. That’s because it’s more opportunities to show up in Google searches or share your posts on social media.
I recommend publishing a new blog post at least once a week. Anything less isn’t advised.
Publishing blog posts consistently is smart because readers know to expect regular content from you.
Why do bloggers fail?
Bloggers fail for many different reasons. These reasons may include:
Giving up too soon. It takes time to make money blogging, and sadly, many people give up just a few months into starting a blog.
Not publishing consistently. I recommend publishing content at least once a week, as described in the previous section. Some new bloggers may go months without publishing, and this will take them much longer to make money blogging as they are simply not dedicating enough time to their blog.
Not spending enough time learning about blogging. Blogging is not as easy as you may think. There is a lot to learn in order to make it work. You may need to learn about how to grow your blog’s traffic, how to monetize a blog, how to write high-quality content, and more.
Not having your own domain and self-hosting. If you want to make money blogging, I highly recommend owning your domain name and being self-hosted. The longer you put this easy step off, the longer it will most likely take for you to make money blogging. You can learn more at How To Start a WordPress Blog.
And much more. Blogging is like any business – there are things to learn, things to improve on, and more.
How do I start a blog?
If you have any other questions related to starting a blog, I recommend checking out What Is A Blog, How Do Blogs Make Money, & More. In this article, I answer more questions related to blogging such as:
How do I come up with a blog name?
What blogs make the most money?
How do you design a blog?
How many views do you need to make money blogging?
How many blog posts should I have before launching?
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Credit card companies report payments at the end of their monthly billing cycle, also known as the statement closing date.
Credit cards are great for making large purchases and racking up points or miles and useful for building and improving your credit. If you’re a credit card holder constantly tracking your credit score to see improvement, it can be helpful to know when companies report to credit bureaus.
Unfortunately, issuers don’t report to credit reporting agencies on a specific day of the month. However, we can investigate a few factors to provide a prediction of when they will report as well as when you will see your payments reflected on your credit report.
Table of contents:
When do credit card companies report to credit bureaus?
How does credit card utilization affect your credit score?
How to decrease your credit utilization risk
How often do credit reports and scores update?
When do credit card companies report to credit bureaus?
Unfortunately, there isn’t a set date for when credit card companies report to the three credit bureaus: TransUnion®, Experian® and Equifax®. However, you can estimate the time frame by considering a few factors. Credit card companies typically report payments at the end of the monthly billing cycle. This is also known as your statement closing date. You can find these dates on your monthly statement.
However, don’t expect your credit report to update on the same day. It usually takes a bit for credit reporting agencies to update the information on your credit report. Updates on your credit report will also depend on:
The number of lines of credit
Due dates for every line of credit
If the credit issuer reports to all three credit bureaus or just one or two
The frequency and speed with which the credit bureau updates reports
If you’ve just paid your statement balance or previously unpaid balances, you likely want to see that reflected on your credit report as soon as possible. Since we don’t have a set-in-stone date for when you’ll see updates on your credit report, we recommend waiting at least a month or so to see any changes. If several months pass and you don’t see any updates to your report, we recommend contacting your credit card company to confirm your payments were correctly processed.
How does credit card utilization affect your credit score?
Credit utilization is the ratio of your current outstanding credit debt to how much total available credit you have. Available credit is the maximum amount of money you can charge to your credit card. A low credit utilization is a good sign that you, the borrower, are using a small amount of your credit limit.
A large outstanding credit balance—or higher credit utilization—can negatively affect your credit. This is especially true if the credit utilization percentage is higher than 30 percent. The lower your credit utilization, the better your credit may be.
How to decrease your credit utilization
Your credit score is affected by five factors: credit utilization, credit mix, new credit, payment history and length of credit history. However, credit utilization makes up 30 percent of your score. If you’re worried about how your credit utilization impacts your credit score, there are ways to decrease your risk and potentially improve your credit.
1. Complete multiple payments
Completing smaller payments every month can help lower your credit balance. You can also set up automatic payments so your credit balance is as low as possible when your credit card company reports to the credit bureaus.
2. Ask for a higher credit limit
Increasing your credit limit can lower your credit utilization ratio, as you’ll have more credit available. This can improve your credit score as it reduces the percentage of credit used every month. However, a higher credit limit may encourage you to spend more, which could go against your goal to improve your credit. Only ask for a higher credit limit if you think you’ll stay within your current average spending amount.
3. Complete payments on time
Paying your bills by their due date is the easiest way to improve your credit. This can become harder if you have multiple credit accounts, as they won’t always have the same due dates. Keeping track of your due dates (found on the monthly statements) via credit card management apps or similar tools can help you stay on top of your bills.
If you can do so, making multiple payments on your card(s) throughout the month is the smartest move. This is because it can increase the likelihood that your credit utilization ratio is low when your credit card provider reports your data to the credit bureaus.
How often do credit reports and scores update?
While there isn’t an exact date when your credit score and report will update, it usually occurs within a 30- to 45-day timeframe. This also depends on when the credit bureaus refresh the information in your report. Remember that if you have multiple lines of credit, you’ll see your credit score constantly fluctuating based on when your creditors report to the credit reporting agencies.
How long until a new card appears on your credit report?
Just received and activated a new credit card? You’ll need to wait a bit to see your new credit card appear on your credit report. You can expect it to show up 30 to 60 days after your application was approved and your creditor opened the account. The number of days will depend on your credit card’s billing cycle.
Assess your credit with Lexington Law
Now that you have a better understanding of when companies report to credit bureaus, it’s also a good time to assess your credit score. If you receive your credit report and notice your credit score isn’t as good as it should be, don’t worry. With help from professional credit repair consultants at Lexington Law Firm, you may be able to improve your credit through our credit repair process. Get started with a free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!
Buyers who expect mortgage rates to drop must wait longer. (iStock)
Mortgage rates eased slightly this week, enough to reheat the homebuying momentum as the market heads into a traditionally busy season of the year, according to Freddie Mac.
The average 30-year fixed-rate mortgage was 6.88% for the week ending March 7, according to Freddie Mac’s latest Primary Mortgage Market Survey. That’s a drop from the previous week when it averaged 6.94%. A year ago, the 30-year fixed-rate mortgage averaged 6.73%.
The average rate for a 15-year mortgage was 6.22%, down from 6.26% last week and up from 5.95% last year.
The slight drop in borrowing costs led to a nearly 10% jump in mortgage applications, indicating that buyer interest is strong as the market heads into the spring homebuying season, according to the latest Mortgage Bankers Association Weekly Applications survey.
“Evidence that purchase demand remains sensitive to interest rate changes was on display this week, as applications rose for the first time in six weeks in response to lower rates,” Freddie Mac Chief Economist Sam Khater said. “Mortgage rates continue to be one of the biggest hurdles for potential homebuyers looking to enter the market. It’s important to remember that rates can vary widely between mortgage lenders, so shopping around is essential.”
If you are looking to take advantage of the current mortgage rates by refinancing your mortgage loan or are ready to shop for the best rate on a new mortgage, consider visiting an online marketplace like Credible to compare rates and get preapproved with multiple lenders at once.
SOCIAL SECURITY: COLA INCREASING BUT MEDICARE COSTS RISING TOO IN 2024
Market waits for rates to drop
While the Federal Reserve has said that the plan to reverse interest rate hikes is still in the works, the timeline for when those cuts will begin has been unclear. A reversal in interest rates is crucial in creating more affordability for buyers also dealing with record home price gains.
However, housing supply is improving, according to a recent Redfin report. New listings rose 13% from a year earlier nationwide during the four weeks ending March 3, the most significant increase in nearly three years. And home prices have also lost some momentum. Roughly 5.5% of home sellers dropped their asking price, the highest share of any February since at least 2015, while the share of affordable homes on the market has increased, according to Realtor.com.
“Mortgage rates remain stubbornly high, and since there is no indication that the Fed will set interest rates meaningfully lower in the short term, it is unlikely that mortgage rates will fall much this year,” Voxtur Analytics Senior Vice President David Sober said in a statement. “If a potential homebuyer is waiting for a lower rate, with house prices still rising overall, they probably won’t get the deal they want anytime soon.”
If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.
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Buyers should shop for the best rate
Despite the continued increase in rates, homebuyers could save on borrowing costs by shopping for the best rate with the right lender.
When mortgage rates are high, borrowers can save more by shopping around. Mortgage rate variability more than doubled in 2022 when rates exceeded 7%, according to Freddie Mac research. Borrowers who shopped for five different rate quotes could have saved more than $6,000 over the life of the loan, assuming the loan remains active for at least five years.
“The increase in rate dispersion means that consumers with similar borrower profiles are being offered a wide range of mortgage rates,” Genaro Villa, a macro and housing economics professional for Freddie Mac, said in the research brief. “In the context of today’s rate environment, although mortgage rates are averaging around 6%, many consumers that fit the same borrower profile could have received a better deal on one day and locked in a 5.5% rate, and on another day locked in a rate closer to 6.5%.”
If you are ready to shop for a mortgage loan or are looking to refinance an existing one, you can use the Credible marketplace to compare rates and lenders and get a mortgage preapproval letter in minutes.
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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Personal loan interest rates can range from 6 to 36 percent and are based on various factors. Your interest rate may depend on your credit score, the lender type and other factors based on your financial situation.
Recent data shows Americans have over $241 billion in personal loan debt. Whether you have personal loan debt or are considering taking out a personal loan, this may not always be bad debt. When used responsibly, personal loans can help you get better interest rates by consolidating other debts or help when you need additional funds. When taking out a loan, it’s helpful to know the average personal loan interest rates so you can get the best deal possible.
The interest rate is a fee based on the percentage of the loan amount, so ideally, you want the lowest interest rate possible. We’re going to discuss the average interest rates based on various factors, like your credit score and lender types, to help you find a loan that has the best rates.
Average personal loan interest rates by credit score
One of the best ways to get the lowest interest rates for personal loans is by having a high credit score. There are ways to get a loan with bad credit, but these loans often have some of the highest interest rates. High interest rates mean you may pay hundreds or thousands more in interest fees when you take out a loan. Below is a chart showing the difference between interest rates when taking out a loan based on your credit score:
Credit score
Average loan interest rate
300 – 629
28.50% – 32.00%
630 – 689
17.80% – 19.90%
690 – 719
13.50% – 15.50%
720 – 850
10.73% – 12.50%
Source: Bankrate
Average personal loan interest rates by lender type
You have a variety of options when taking out a personal loan. You can go into traditional brick-and-mortar financial institutions like banks or credit unions and find personal loans online. Some of these lenders may even offer bad credit loans, but remember, these typically come with higher interest rates.
In the following sections, we show interest rates from some of the most popular lenders from each category. As you’ll see, each lender has a range of interest rates, which depends on your credit score, income and other financial information.
Average personal loan rates by bank
Personal loan interest rates from banks can range from 6.99 percent to 24.99 percent. Currently, Santander Bank offers the lowest interest rate range.
Average personal loan rates by credit union
Credit unions are another way to get personal loans, and they’re similar to banks except they’re member cooperatives and not-for-profit. Each of the credit unions listed below has lower interest rates on the higher end of the range, with none being over 20 percent.
Average personal loan rates by online lender
Many people turn to online lenders because not only are they convenient, but they’re also more likely to lend to those with bad credit or those who need a personal loan after a bankruptcy. Depending on your credit score and credit history, some of these personal loans have the highest interest rates.
5 factors that affect your personal loan interest rate
If you’re in the market for a personal loan, it’s helpful to know what lenders are looking for. This helps you get approved for the loan and the best interest rate possible. If you have poor credit, using a cosigner may help with approval, but if you want to get a personal loan without a cosigner, here’s what lenders are looking at:
Credit score and report: Your credit score and report show your credit history and how likely you are to pay back your loan. A low credit score can lead to higher interest rates.
Income: Lenders use your income to determine the loan amount and whether you can pay the amount back.
Debt-to-income ratio: Your debt-to-income ratio is a calculation of how much debt you currently have compared to your income. Ideally, it should be low.
Employment status: Employment shows a steady flow of income. If you’re self-employed or an independent contractor, it may make getting a loandifficult.
Length of loan: Shorter loan terms often come with higher interest rates.
What is a good personal loan interest rate?
What’s considered a “good” personal loan interest rate will depend on the person and their situation. Typically, a good interest rate is anything below the average rate for your credit score. Ideally, you want to improve your credit to get even better interest rates on personal loans.
How your credit score affects your personal loan interest rate
Your credit score and credit history play a big part in getting a good personal loan interest rate. As mentioned earlier, a high interest rate can cost you thousands in additional interest fees. If you have a bad credit score, you may have errors on your credit report that are hurting your credit. Lexington Law Firm offers an in-depth credit assessment that shows you where your credit stands before you apply for a loan. Get your free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!